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    SNFCA
    Earnings call· Jun 2026(Q2 FY26)

    SECURITY NATIONAL FINANCIAL Q2 FY26 earnings call SNFCA

    Aug 13, 2026 Source

    Executive summary

    Security National Financial Corporation Q2 FY26 — Profitability Improves Despite Revenue Decline

    Security National Financial Corporation delivered improved profitability in Q2 FY26, driven by operational efficiencies across segments, particularly in Mortgage and Cemetery/Mortuary, despite a consolidated revenue decline. The company is strategically investing in landholdings and sales talent for future growth, while navigating headwinds from lower single premium sales and reduced homebuilder profit share in its Life segment. Management remains focused on balancing revenue growth with sustained profitability.

    Highlights

    5

    • Consolidated net earnings increased 7.3% for the quarter and 8.1% for the first half of FY26.

    • Mortgage segment achieved its first profitable quarter since Q3 FY25, with a $1.6 million Q2 profit improvement and $3 million H1 profit improvement.

    • Cemetery/Mortuary segment revenue increased 21% for the quarter and 13% for the first half, with profit improving 69% and 29% respectively.

    • Total assets grew to $1.61 billion, an increase of $47.5 million or 3% compared to year-end.

    • Stockholders' equity increased $22.7 million or 5.5% to $433 million.

    Concerns

    5

    • Consolidated top-line revenue decreased 6.3% for the quarter and 5% for the first half.

    • Life Insurance segment revenue decreased 5.5% for the first half and profitability decreased 13%, driven by lower single premium sales and investment income.

    • Mortgage origination volumes decreased 11% year-over-year to $548 million in Q2.

    • Loans more than 90 days past due increased to $15.8 million as of June 30, 2026, from $6.5 million at year-end.

    • Cemetery operating earnings before tax decreased 4.8% due to costs outpacing revenue.

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Mortgage
    Achieved first profitable quarter since Q3 2025 due to significant operational improvements despite reduced origination volumes. Increased market share and focus on repeat borrowers proved effective.
    Q1 year-over-year profitability improvement: $1.4 millionQ2 year-over-year profitability improvement: $1.6 millionFirst half 2026 profit improvement: $3 millionQ2 2026 loan volume originated: $548 millionQ2 2025 loan volume originated: $617 millionYear-over-year decrease in origination volume: 11%Sequential quarter increase in origination volume: 12%Q2 2026 market share: 10 bpsQ1 2026 market share: 9 bpsQ2 2026 refinance percentage: 17%Q2 2025 refinance percentage: 14%Home Equity Line of Credit (HELOC) transactions: 1 per day in Q2
    		—-9%—$71,000 pretax net income
    Cemetery Mortuary
    Stellar results driven by improved preneed cemetery sales and a favorable investment tailwind. Operating profitability was impacted by investments in talent and technology, leading to increased compensation costs.
    Q2 earnings before tax growth: 69.5%First half earnings before tax growth: 29%Operating revenue increase (excluding investments): 5.5%Operating earnings before tax decrease (excluding investments): 4.8%Funeral Homes revenue increase: 7.4%Funeral Homes earnings before tax decrease: 3.2%Funeral Homes families served increase: 1.1%Funeral Homes average revenue per call increase: $323 or 6.2% to $5,549Cremation with service share: 41.9%Cemeteries revenue increase: 4%Cemeteries earnings before tax decrease: 5.8%Net preneed land sales increase: 6.1% to $2.34 millionPlacements increase: 5.1% to 348Traditional interments increase: 12.1% to 268Segment net profit margin (first half): 23%
    		$9.8 million20.7%—$3 million earnings before tax
    Life Insurance
    Revenue and earnings decreased due to a strategic shift away from less profitable single premium products and lower net investment income. Significant investments in landholdings and sales force are expected to drive future profitability.
    Net earnings before taxes decrease: 13%Q2 revenue: $49.5 millionQ2 net earnings before taxes: $8.5 millionInsurance premiums and other considerations decrease: 4% to $57.6 millionQ2 premiums decrease: 5% to $28.7 millionRenewal premium base growth (individual whole life): 1.5%Net investment income decrease: 14% to $33.4 millionQ2 net investment income decrease: 21% to $15.7 millionHomebuilder profit share income decline: $2.8 million year-to-date, $2.5 million in Q2Interest and fee income from residential construction lending decline: $1.1 million year-to-date, $1 million in Q2Investment in land and residential subdivision development: $122 million as of June 30Investment in land and residential subdivision development (year-end): $98 millionGain on equities and other assets increase: $2.5 million to $3.7 millionUnrealized gains in equity portfolio increase: $1.9 millionRealized gains on real estate increase: $850,000Total selling, general and administrative expenses decrease: 3.3% to $25.9 millionQ2 selling, general and administrative expenses decrease: 3.4%Personnel expense increase: 2.8% year-to-date, 3.2% in Q2Policyholder benefits and claims decrease: 4% year-to-date, 5% in Q2Total benefits and expenses decrease: 3.7% year-to-date
    		$98.4 million-5%—$16.1 million net earnings before taxes

    Operational metrics

    31
    Consolidated Net Earnings
    7.3%YoY increase
    Q2 FY26

    Increase over 2025.

    Consolidated Net Earnings
    8.1%YoY increase
    H1 FY26

    Increase over 2025.

    Consolidated Revenue
    -6.3%YoY decrease
    Q2 FY26

    Top line revenue decrease.

    Consolidated Revenue
    -5%YoY decrease
    H1 FY26

    Top line revenue decrease.

    Total Assets
    $1.61 billion3% increase
    June 30, 2026
    Cash and Cash Equivalents
    60%increase
    Q2 FY26

    Increased since December 31, 2025.

    Combined Investment Portfolio
    $1 billion-1.2% decrease
    June 30, 2026
    Total Liabilities
    $1.18 billion2.2% increase
    June 30, 2026
    Stockholders' Equity
    $433 million5.5% increase
    June 30, 2026
    Debt-to-Equity Ratio
    2.72ximproved from 2.81x
    June 30, 2026
    Net Earnings
    $90 million28.3% increase
    Q2 FY26
    Combined Commissions and Personnel Expense
    -13.5%YoY decrease
    Q2 FY26

    Reflecting continued efficiency efforts.

    Combined Commissions and Personnel Expense
    -11.8%YoY decrease
    YTD FY26

    Reflecting continued efficiency efforts.

    Comprehensive Income
    $22.4 million86.6% increase
    YTD FY26

    Driven by a swing from a $10.2 million charge in H1 2025 to a $12.9 million benefit in H1 2026.

    Comprehensive Income
    $7.3 million-18.2% decrease
    Q2 FY26

    Down from Q2 2025, showing sensitivity to discount rate movements.

    Fixed Maturity Security Portfolio Investment Grade
    98.4%unchanged from 98.5%
    June 30, 2026
    Non-Investment Grade Bond Portfolio
    1.6%
    June 30, 2026
    Loans More Than 90 Days Past Due
    $15.8 millionincreased from $6.5 million
    June 30, 2026

    Trend is being monitored closely.

    Mortgage Segment Pretax Net Loss
    $1,671,000
    Q2 FY25

    Compared to pretax net income of $71,000 in Q2 FY26.

    Mortgage Segment Pretax Net Income Improvement
    $1,742,000104% increase
    Q2 FY26

    Year-over-year improvement.

    Life Segment Total Revenues
    $104 million
    YTD FY25

    Compared to $98.4 million in YTD FY26.

    Life Segment Net Earnings Before Taxes
    $18.6 million
    YTD FY25

    Compared to $16.1 million in YTD FY26.

    Life Segment Q2 Revenues
    $52.4 million
    Q2 FY25

    Compared to $49.5 million in Q2 FY26.

    Life Segment Q2 Net Earnings Before Taxes
    $10.6 million
    Q2 FY25

    Compared to $8.5 million in Q2 FY26.

    Life Segment Q2 Premiums
    $30.2 million
    Q2 FY25

    Compared to $28.7 million in Q2 FY26.

    Life Segment Net Investment Income
    $38.6 million
    YTD FY25

    Compared to $33.4 million in YTD FY26.

    Life Segment Selling, General and Administrative Expenses
    $26.8 million
    YTD FY25

    Compared to $25.9 million in YTD FY26.

    Cemetery Operating Revenue (excluding investments)
    $7.4 million
    Q2 FY25

    Compared to $7.8 million in Q2 FY26.

    Cemetery Operating Earnings Before Tax (excluding investments)
    $1 million
    Q2 FY25

    Compared to $963,000 in Q2 FY26.

    Cremation with Service Share
    49.9%
    Q2 FY26

    Share of cremation families choosing a memorial or funeral service.

    Cemeteries Revenue
    $4.1 million
    Q2 FY25

    Compared to $4.3 million in Q2 FY26.

    Product announcements

    1
    ProductTypeDetails
    Life Insurance Sales Process and Offeringsupdate

    Risks & headwinds

    7
    Declining Death Rate2026

    Lowest level in recent years in 2026

    Mitigation: Diversified income streams, improved preneed cemetery sales, and focus on cremation with service.

    Lower Loan Origination VolumesQ1 FY26

    Utah New home starts down 40.6%

    Mitigation: Construction-related loan originations rebounded strongly in Q2, strategic landholdings for future profitability.

    Increased Interest Rate CompetitionQ1 FY26

    Decreased interest income in Life segment

    Mitigation: Strategic decisions to increase landholdings for greater future profits.

    Mortgage Origination Volume DeclineQ2 FY26

    11% year-over-year decrease to $548 million in Q2

    Mitigation: Focus on repeat borrowers, increased market share, and operational efficiencies leading to profitability despite lower volumes.

    Mortgage Loan DelinquencyJune 30, 2026

    Loans more than 90 days past due increased to $15.8 million from $6.5 million at year-end

    Mitigation: Allowance for credit losses on mortgage loan portfolio remains appropriately reserved; monitoring trend closely.

    Cemetery Operating Costs Outpacing RevenueQ2 FY26

    Operating earnings before tax decreased 4.8% (excluding investments); total operating costs increased 8.8% against revenue growth of 7.4% in Funeral Homes

    Mitigation: Investments in talent and technology to support future growth and efficiency; leveraging existing investments across a growing revenue base.

    Wholesale Margin Pressures in CemeteriesQ2 FY26

    Cost of goods sold increased 3.1%

    Mitigation: Focus on building family relationships, generating steady preneed production, sharpening sales execution, and adding capacity through garden developments.

    What to watch in Q3 FY26

    5

    Mortgage Segment Profitability

    Next quarter / Year-end
    Current$71,000 pretax net income in Q2
    TargetContinued profitability and progress towards full-year profitability

    Why it matters

    The mortgage segment achieved its first profitable quarter since Q3 2025, and sustained profitability is key to overall company performance.

    Much work remains to be done. But after all the hard work of our team, it is gratifying to see this segment profitable in Q2 and within striking is the profitability towards the year.

    2 min read6 chapters

    Detailed Narrative

    01

    Overall Financial Performance and Strategic Focus

    Security National Financial Corporation reported a 7.3% increase in Q2 net earnings and an 8.1% increase for the first half of FY26, despite a 6.3% and 5% decline in consolidated revenue for the respective periods. Management emphasized a strategic focus on improving profitability over top-line revenue growth in the current market. The company has undertaken extensive operational improvements across all segments, including management structures, margins, marketing, commissions, products, pricing, and back-office efficiencies.

    02

    Mortgage Segment Turnaround

    The mortgage segment was highlighted as a strong performer, achieving its first profitable quarter since Q3 FY25. Q2 saw a $1.6 million profit improvement year-over-year, contributing to a total $3 million profit improvement in the first half of FY26. This turnaround occurred despite an 11% year-over-year decrease in origination volumes to $548 million in Q2, reflecting significant operational efficiencies. The company's market share increased to 10 basis points in Q2, up from 9 basis points in Q1, and repeat borrower percentage is at a 3-year high.

    03

    Cemetery and Mortuary Segment Growth

    The Cemetery and Mortuary segment delivered strong results, with revenue increasing 21% for the quarter and 13% for the first half, leading to profit improvements of 69% and 29% respectively. This growth was primarily driven by improved preneed cemetery sales, which saw an 11% revenue improvement and 17% profitability improvement. The segment also benefited from a $1 million favorable investment tailwind in Q2, achieving a nearly 23% segment net profit margin in the first half.

    04

    Life Insurance Segment Challenges and Investments

    The Life Insurance segment experienced a 5.5% decrease in first-half revenue and a 13% decrease in profitability. This was attributed to a deliberate shift away from less profitable single premium products and a decline in net investment income, particularly from homebuilder profit share. Despite these declines, the company is making significant investments in sales leadership, distribution platforms, and landholdings ($122 million as of June 30, up from $98 million at year-end) which are expected to drive greater future profitability.

    05

    Balance Sheet and Capital Strength

    The company's balance sheet showed continued strengthening, with total assets growing to $1.61 billion, an increase of $47.5 million or 3% from year-end. Stockholders' equity increased $22.7 million or 5.5% to $433 million, leading to an improved debt-to-equity ratio of 2.72x from 2.81x at year-end. Cash and cash equivalents increased 60%, while the investment portfolio decreased slightly as the company seeks deployment opportunities.

    06

    Credit Quality and Investment Portfolio

    The fixed maturity security portfolio remains high quality, with 98.4% rated investment grade. However, loans more than 90 days past due increased to $15.8 million from $6.5 million at year-end, a trend being closely monitored. The allowance for credit losses on the mortgage loan portfolio is deemed appropriately reserved. The company also noted a $23 million favorable swing in comprehensive income year-to-date due to interest rate remeasurement under LDTI.

    AI-generated summary of the company’s earnings call. Not investment advice.